What is SEPA?

Introduction

European Payments Council (EPC) representing the European banking industry, the European Central Bank (ECB) and the European Commission (Commission) share a common vision for the creation of the Single Euro Payments Area (SEPA).

SEPA will be an area in which consumers, companies and other economic actors will be able to make and receive payments in euro, whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location in SEPA

SEPA will create a single euro payments area. People will be able to make payments in euro all over Europe as easily as if they were making a payment in their home town.

What is SEPA’s objective?

To provide standardized transfers, debits and card transactions throughout Europe and to ensure fast and efficient cashless money flows within Europe, making international payments as easy and convenient as domestic ones.
The goal is to form a single market for payment transactions within the European Economic Area.

Advantages for making transfers with SEPA

• Simple: International Payment Transfer (withing SEPA Countries) will be just simple as domestic payments


• More Efficiency: Europe will become more efficient thanks to the harmonisation of the payments involved in almost every economic transaction that takes place in society


• Faster: The beneficiary is credited within three bank working days.


• Free of Charge: As of 1 May 2008 you can make euro transfers via e-fi nance or as electronic payments orders (EPO) free of charge.

Way to Achieve the Goal

The ways to do this is to create a set of standards for electronic payments using ISO20022 XML format together with a set of rules and guidelines as to how Euro payments must be handled.

With a common standard it will be easier to process payments with more efficiency in the banking system and with lower prices. It will also make it possible for companies that have business activities in many countries to only interact with one bank, since the cross-border payment is assumed to be the same as the domestic payment.